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Let us take a look at a few definitions of Applied Economics.
Applied economics can be defined as the application of economic theories and principles to real-world scenarios in order to predict outcomes.
Applied economics is also defined as the application of core theories of economics and econometric tools to answer questions in a wide range of fields.
In situations where an economic analysis needs to be done in the absence of sufficient data, applied economists use the core theoretical models of econometrics to make the required predictions. Some of these analysis can be done using simple graphical depictions, a more advanced analysis may need the use of external estimates such as the elasticities of demand and supply in the specific industry to make more reliable predictions
There can also be instances when applied economists may be required to analyse certain data and come up with answers to a number of questions based on it. Applied economists may have to estimate the impact of policy decisions on the economy or individuals. In a very relevant example provided by Professor Kara Reynolds of the American University, Washington DC, she, as an applied economist was interested finding out if the TAA (Trade Adjustment Program) was effective in helping workers who have lost their jobs due to increased trade, find new and better well-paying jobs.
She used data from the Department of Labor and the US Census Bureau's current population survey and an empirical methodology called "Propensity Score Matching" and matched each worker who had participated in the program with other similar workers who had lost their jobs but had not participated in the TAA program to compare their employment outcomes.
The applied economist found that the TAA, as such did not help workers find new, well-paying jobs, but the workers who participated in the training programs of TAA did considerably better than those who did not take part in these training sessions.
Applied economists can be found in almost all industries - they work in financial institutions, government and non-government agencies, consulting agencies. In fact, most professional economists are applied economists, who go about predicting situations, answering questions and solving various day-to-day problems using both theoretical and econometric tools.
If you wish to become an Applied Economist, there are a number of courses you can pursue, like for example, ECON-623 & ECON-624 of the American Univeristy, Washington DC.
Note: All information provided above is for information purposes only. We are an independent provider of academic support services and not related to American University, or any other university, in any manner whatsoever.
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